KUALA LUMPUR (Jan 17): The Kuala Lumpur High Court heard yesterday that former 1Malaysia Development Bhd (1MDB) chief executive officers Datuk Shahrol Azral Ibrahim Halmi and Arul Kanda Kandasamy were both uncooperative and delayed giving information about the state investment arm to the National Audit Department (NAD).

Former NAD audit director Saadatul Nafisah Bashir Ahmad (pictured) described Arul Kanda as an intelligent man who took over the reins of 1MDB on Jan 5, 2015, and had "worked very well" with her.

However, his promises to give her the necessary information or documents about 1MDB almost did not materialise.

She said in 2016, her department was facing pressure from the Public Accounts Committee (PAC) to complete the audit.

"We asked for the information for a long time, we waited for three months for the information, the PAC had also asked us when the report is coming out. I went to see Arul the 1MDB president so many times but there was no response," said Saadatul, the seventh prosecution witness in the 1MDB audit report tampering trial.

"He would always say no problem, but the information never came to us. He should have informed us rather than have us waiting for months,"

Saadatul was responding to questions put forth to her by lead defence lawyer in the trial Tan Sri Muhammad Shafee Abdullah, who was representing Datuk Seri Najib Razak, in his cross-examination of the witness.

Shafee had asked her if she had received the information she required to complete her audit, she replied in the affirmative but said that Arul Kanda had only furnished her with 60% of the information sought by the NAD.

"We did not get 100%, only 60%. It took a long time," Saadatul Nafisah said.

Shafee then trained his guns on Shahrol, blaming him for being uncooperative with the NAD when they were conducting a separate audit on 1MDB in 2010.

Saadatul said she knew of her team's run-ins with Shahrol, but had not worked directly with him as she was not assigned to the 1MDB audit team when he was still the CEO.

"Shahrol objected every step of the way [to the audit]. You have documents [reports] and know about this. I can show you correspondence of how obstructive he was to your investigation," Shafee told her.

"At that time he was CEO, yes he did not cooperate. But when I took over [the special audit] Arul Kanda was the president and CEO, he should have had the information," she said in response.

Saadatul agreed with Shafee that the exit conference was not done with Arul Kanda earlier as the final audit report was classified under the Official Secrets Act 1972, after 1MDB's interim report was leaked earlier.

She said it was gazetted as classified by the then-Auditor General Tan Sri Ambrin Buang on the advice of the Chief Government Security Office following the leaks.

The witness, however, disagreed with Shafee's suggestion that there was no natural justice in NAD's action in not referring to Arul Kanda the report during the exit conference.

The report was first handed to Najib's then principal private secretary Tan Sri Mohd Shukry Salleh on Feb 20, 2016. Mohd Shukry later passed it to Najib, who allegedly wanted then chief secretary to the government Tan Sri Ali Hamsa to coordinate the changes to the final report in a meeting on Feb 24, 2016.

Earlier, Shahrol had testified during the 1MDB-Tanore trial that he was acting on instructions of fugitive financier Low Taek Jho, better known as Jho Low, to restrict certain documents from being accessed by the NAD for the purposes of the audit in 2010.

Shahrol had admitted that had the NAD proceeded with the audit on 1MDB — then known as Terengganu Investment Authority (TIA) — the authority would have unearthed Jho Low's misappropriation of funds from the issuance of RM5 billion Islamic Medium Term Notes (IMTN).

Shahrol said Jho Low had told him that the NAD's audit on 1MDB would pose a political risk to Najib, as the opposition was already playing up the RM5 billion IMTN issue at the time.

After TIA was acquired by the Minister of Finance Inc in 2009, Shahrol said he wrote a letter to the NAD stating that Najib did not consider the audit necessary and that Ernst & Young would be appointed as external auditors.

Shahrol signed the letter but contended that the contents were prepared by Jho Low.

The letter stated that the takeover of the TIA to become 1MDB was done on an 'as is where is' basis, and because of that, it would not have to be audited or undergo a due diligence conducted by the NAD.

Najib is charged with abusing his power under Section 23 of the Malaysian Anti-Corruption Commission (MACC) Act to order the alteration of the audit report to prevent action from being taken against him.

Arul Kanda, who is jointly tried with Najib, faces a charge of abetting the ex-premier.

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